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The text explains the difference between simple and compound sentences, noting that a simple sentence consists of one independent clause, which includes a subject, a verb, and expresses a complete thought. In contrast, a compound sentence contains two independent clauses, each with a subject and a verb, which are connected by coordinating conjunctions. To exemplify this, the tutorial provides a process for transforming simple sentences into compound ones by adding an independent clause. It suggests options for independent clauses, such as "the cat watched" and "the owner was angry," and demonstrates how to join them using coordinating conjunctions, producing compound sentences like "The dog dug a hole in the yard and the cat watched."